The Cold Start Problem — Andrew Chen

Summary in 15 minutes. A network grows more valuable as it grows. The trouble is the beginning, when there is almost nobody in it. Once one small network holds, the job is to reach the next one, and then the whole market. Fast growth eventually slows. Then you have to break through the ceiling and fend off competitors. You have read the ideas. Now build one small network, make it dense, then move to the next group.

Key ideas of "The Cold Start Problem: How to Start and Scale Network Effects"

The Cold Start

A network grows more valuable as it grows. The trouble is the beginning, when there is almost nobody in it.

1. Nobody Stays at an Empty Club: The bright and dark sides of network effects
2. The Atomic Network: The smallest network that holds together
3. Win the Hard Side First: The few who do most of the work
4. The Killer Product: Magic moments and the fear of zeros

Spreading Out

Once one small network holds, the job is to reach the next one, and then the whole market.

1. One Campus at a Time: Reaching the tipping point
2. The Launch Playbook: Invitations, tools, elbow grease and money
3. Three Engines of Growth: Escape velocity

Ceilings and Moats

Fast growth eventually slows. Then you have to break through the ceiling and fend off competitors.

1. Hitting the Ceiling: Why growth stalls
2. When the Crowd Arrives: Eternal September and overcrowding
3. The Moat: Using networks to beat networks
4. Network Wars: Big bangs, the hard side and bundling

Put It to Work

You have read the ideas. Now build one small network, make it dense, then move to the next group.

1. Your 7-Day Plan: One task a day. Tick it off when done.
2. One-Page Cheat Sheet: The whole book at a glance. Save it.
3. Final Word: Start Small: Every big network was empty once

From the free first chapter

Andrew Chen led rider growth teams at Uber for several years and is now a general partner at Andreessen Horowitz. For this book he talked with teams from Slack, Airbnb, Tinder and many others.

In the early 1900s AT&T’s president Theodore Vail made this case for the telephone. Later came Metcalfe’s Law: double the users and a network’s value roughly quadruples. Chen finds it too tidy: it ignores the start, when people arrive, find nobody and leave. He calls these anti-network effects.

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